Postal rate proposal sent back to commission

WASHINGTON (AP) ? Whether postal rates should rise more than inflation is back in the hands of the independent Postal Regulatory Commission.

From Archive Data

WASHINGTON (AP) — Whether postal rates should rise more than inflation is back in the hands of the independent Postal Regulatory Commission.

The federal Court of Appeals for the District of Columbia on Tuesday told the commission to reconsider its rejection of the Postal Service's request last fall to raise rates. Normally increases are limited to the inflation rate, but the post office cited the unusual circumstances of the recession and the decline in mail volume because people and businesses are switching to the Internet.

The post office is facing a potential loss of $8 billion this year.

In turning down the rate increase request the commission said the post office's biggest problem is a requirement that it set aside $5.5 billion a year for future retiree health benefits.

The court said the commission was correct in concluding that, to get the unusual rate increase, the post office must show that the problem is due to unusual circumstances, but was wrong in insisting that the amount of the increase precisely match the losses caused by those circumstances.

"We are encouraged by the court's decision," the post office said in a statement. "While we continue to evaluate the court's opinion and ruling to understand the full implications and options it presents to the Postal Service, we have renewed confidence that we are entitled to a rate increase under" the unusual circumstances provision.

The proposed increase would have boosted the price of a first-class stamp by 2 cents to 46 cents. Many postal rates increased in April by smaller amounts than had first been requested, and the changes largely affected businesses rather than individuals.